patrick.net

The biggest export from America? The middle class.
"In 1960 you had roughly 8 manufacturing jobs for each one in finance. Today this is less than 2 manufacturing jobs per each job in finance. In the real economy, we still purchase goods that have to be made (i.e., cars, real estate, etc). Yet we have a giant industry that for the most part, is rent seeking."
http://www.mybudget360.com/us-biggest-export-middle-class-jobs/

sbh says

Real wages are measured in purchasing power.

And your favorite way to get there is through a deflationary spiral.

Utter nonsense. One of the objections that I have against government borrowing and spending is that in the long run it is deflationary: every cent borrowed has to be paid plus interest. High real wages as measured in purchasing power can only be achieved through higher worker productivity. More bureaucrats meddling in the market place would just put a higher burden on the real workers.

sbh says

Attractive travel companion does not necessarily mean blowjobs.

Hard to believe you still buy this as a legitimate topic of debate. It's a distraction used to showcase your tin ear. Eventually you'll get it. I'll wait.

You are the one who is obsessed with "blowjobs." In case you did not know, dating and marriage consist of one of the largest forms of wealth transfer historically. What do you think happens after the prince finds Cinderella by fitting the crystal shoe? wealth transfer and sharing between the rich and the poor without the third party taxman in between.

sbh says

I see, you are really

unwilling to let you stage my position. It sucks, I know, but maybe eventually you will learn to let people speak for themselves without bastardizing the discussion in a form that favors your bias.

That would be your own favorite tactic.

Robert Sproul says

The biggest export from America? The middle class.

"In 1960 you had roughly 8 manufacturing jobs for each one in finance. Today this is less than 2 manufacturing jobs per each job in finance. In the real economy, we still purchase goods that have to be made (i.e., cars, real estate, etc). Yet we have a giant industry that for the most part, is rent seeking."

So what?

The US is the largest manufacturer by far it is just that todays manufacturers are highly automated.

The economy changes all the time. The only problem is when the government sticks their nose where it doesn't belong with their "know best" and stop job creation through ENDLESS meddling.

Think about it Henry Paulson runs around like chicken little telling everyone the sky will fall if we don't do TARP and then, they said if a "little" is good more is better and have now spent 6 trillion dollars.

Along with Frank Dodd the Consumer Protection Act and the ACA. You have to wonder how it hasn't imploded already. They really have to be stupid to be so arrogant to think they can "help" the economy. There is a reason why soldiers shoot the lieutenant.

sbh says

In a modern economy with advanced division of labor, the workers' own consumption has to account for a miniscule portion of a specific output product in order for him to be able to afford all the other products in the market that also pique his interest.

What the fuck is this supposed to say let alone mean? Reducing it to basic elements of sentence structure: worker consumption must equal, but not exceed, output equal to his demand? If he is in penury, by employer election, how does compensation ever underpin opportunity? Compensation is always at the point of survival.

Go back and re-read what I wrote and what you quoted for clarification. Put in simple terms: if you work as a hat maker in an economy with advanced division of labor, the number of hats you personally consume would have to be a tiny proportion of the number of hats that you make . . . simply because you need to buy shirt, pants, socks, shoes, food and roof over your head! All those would have to be paid by the numerous hats that you make but do not consume personally. Fairly simple concept summarized by "division of labor." The idea that "worker is consumer" is simply wrong. We do not live in a self-sufficient subsistence farming society.

Compensation is hardly ever at "the point of survival" (whatever that means), just like prices for most products and services are hardly ever at the zero-profit point as the dumb-ass "evenly revolving economy model" would dictate. New products emerge (like the iPhone) and have extremely high profit margins built into the price; Profit attracts competition, then the similar products become commodity in a few years, then manufacturing becomes consolidated to squeeze profit out of lowered prices as most players exit; then the next generation of products of higher margins emerge. Likewise, jobs go through similar cycles: steel making became highly profitable in the late 19th century and could pay very wages for workers . . . then the high profit attracted competition, which drove down prices . . . then carmaking taking advantage of low price steel emerged and created a new drove of high paying jobs. That's how the price cycle works for both products and jobs. Your idea of government intervention to protect old obsolete jobs would only prevent workers from transitioning to the latest/greatest line of jobs while breed more and more bureaucratic monopolies, the burden of which all have to be carried by real workers.

sbh says

Reality says

What's ailing the economy is the government growth..... Likewise, it is the stifling tax and regulation

Bullshit. Corporate profits have NEVER BEEN HIGHER. Can you read? NEVER BEEN HIGHER.

You are talking about large corporations listed among the indices, many of which having achieved some degree of government sponsored monopolistic position. Just look at how many banks are among the list of corporations.

Reality says

If an American does the exact same work that can be easily substituted by an overseas worker

don't blame the worker when he can't buy anything. The worker is the customer.

He is not the only customer. If he is even 1% (usually less) of the total customers for the product, artificially raising the price would make the other 99% of the customers less capable of affording the very same product. The only people enabled in such a process is the bureaucrat assigned to police the price, at the expense of every single customer of the product.

sbh says

I already explained to you the difference between "Asia" a geopolitical term vs. "Far East" a trade term. Then you come back with stupid shit like this while ignoring the most important parts of what I wrote. You are a dumb fuck and too dumb

No, you ran away from what wasn't useful to you. You don't want to face the labor abuses of the rising standards of countries we offshore jobs to, so you make and end-run around generic geography and try to substitute what works better for you.

No I did not. I used the term "Far East" to begin with. You are the stupid fuck who brought here a junior high geopolitical map of Asia. I explained to you why such a map is irrelevant. "Far East" is a reference to the entreports where trade to the west has been concentrated for 5 centuries, not the vast interior wasteland of Asia, which is usually not relevant in trade discussion, but only handy for morons out to paint maps and build empires. You are acting as stupid as the Italian imperialists in the late 19th century: specializing in acquiring deserts!

sbh says

What world do you live in? The typist jobs are long gone. The market already cleared on that.

The world I live in is the one you can't tolerate, you know, the one where the market didn't clear. You've been braying all along that we have no market clearing, that we have all these illegitimate jobs that don't deserve to exist because, well, let's face it, we don't have anarchy. If government exists there are just too many jobs that pay too much. And yes, asshole, you think by forcing down the level of compensation for all those falsely forced-upon jobs there would be a renaissance of living standards due to the resulting deflation and collapse. It's your wet dream.

You are now putting your own stupidity on full display. Market being prevented from clearing is the very definition of Depression. What do you think trade is? What do you think economic activity is? Market clearing! Market clearing through continued trade is what enable division of labor to continue. Obviously your fantasy is to live in a self-sufficient subsistence farming world where each ounce of grain is priced at $1Million and nobody buys or sells anything any way.

When market is being held up by taxation, debt service burden and old input factor price structure, the way forward is to let market find a price point without these hinderences.

If each American production line worker can make 100 widgets an hour. In order to improve productivity, you can try to make them work harder and make 200 widgets an hour, or give them a new job to watch 5 robots each making 100 widgets an hour, or train them to become liasons/purchase-managers who go overseas each watching over 20 foreigners each making 100 widgets an hour. The result is 200/hr vs. 500/hr - capital invest cost in robots vs. 2000/hr - cost of paying foreign workers and travel cost for the American worker. The worker himself may consume only 1 widget/hr or less, the rest is made for all the other Americans who just want the best widgets at the lowest price. Fairly elementary stuff.

When 100 robots replace 100 employees....

Well assuming robots did not build the robots, some jobs were created in building and maintenance of robots.

sbh says

Wasn't it when an ocean of insolvency was lapping at the shores of every continent on this planet? Couldn't you just taste the vindication coming, the big "I told you so"?

No. I didn't tell anyone "I told you so." Not when I shorted the market in 2000, not when I bought long in 2009, not when I sold my primary residence in early 2000's (too early), not when I bought in 2011. In any case, I don't get hard-on from investing in financial assets or real estates. I get hard-on from investing in young women; women little over half my own age. I don't like economic depressions making too many young women desperate; I don't like desperate young women. Too many of them throwing themselves at me makes it hard to find the ones that I'm looking for: the ones who can really take advantage of the opportunities that I offer and make a better future life for herself in the long run.

And then....those ASSHOLES.....you know, Bush's tag-team of Hank and Ben suspended mark-to-market AND TOOK IT ALL AWAY. You've had nothing but flaccid resentment ever since (and I apologize to your significant other, whatever his name is).

I don't have any SO at the moment. I have had 2 serial long term GF's (plus a couple short-term ones in between) since 2008. They were very hot, and I usually last hours when intimate; girls tend to walk funny the next day. In any case, the Bush tag-team were assholes. This depression should have been over in a year to 18 months like the 1921-22 depression instead of the long drag-out affair 5 years later and fraying the fibers of the society itself.

sbh says

Gone was the apocalyptic, blood-in-the-streets market clear and its cathartic phoenix renaissance renewal. THAT'S the world I live in, where I stoically walk through the gauntlet of government coercion down to CVS to buy some anti-biotics with fiat currency rather than having to beat in the head with some rebar some other poor schlub in order to steal the last bottle on the shelf.

In case you did not notice, the "flash mob" and "knock-out" nonsense only became frequent in the last year or so. Prolonged high youth unemployment is leading to severe social problems. A rapid crash in the asset market and new entrepreneurs being allowed to buy up the assets on the cheap then launch new enterprises with little debt burden would have produced far more job opportunities! Yes, that might have killed a few million-dollar bonus Wall Street jobs.

sbh says

After saving the asset markets I now want government to prop up labor markets and force QE down into the servant classes by raising minimum wage to $15 and to triple the taxes for the top 10%.

Such a policy would be just as misguided. A $15/hr minimum wage law would preclude many young people from their first legal jobs. . . while businesses would be forced to turn to banksters for more loans to invest in automatic machines to replace entry level jobs. The problem with the "liberal" statist mind is that they are too dumb to see the unintended consequences; either that, or the leftist leaders are in the pockets of the banksters and see the consequences very well.

Triple the taxes for the top 10%? Are you talking about raising the 37% to 111% of income or tripling the income tax on couples livign on two $50k/yr incomes (the cut-off line for top 10% income is around $100k/yr)? The former is mathematically impossible. The latter would destroy the middle class.

Reality says

Austrian Economics is not in the prediction business per se

It's not in the explanation business either. Really, it's not in any business....

thunderlips11 says

...impose a modest tariff, like we've had almost the entire history of the USA until the 70s, and keep our standard of living.

I'd be OK with a more then modest tariff.

Reality says

No, it is not in the con business like Keynesians.

Keynesians (not that anyone has actually implemented what Keynes wrote) and Austrians are both in a con game. Austrian translates into plutocratic oligopoly, Keynesian translates into welfare state.

zzyzzx says

I'd be OK with a more then modest tariff.

Tariffs are a two way street.

indigenous says

zzyzzx says

I'd be OK with a more then modest tariff.

Tariffs are a two way street.

Not when you have an epic sized trade deficit like we do!

zzyzzx says

ndigenous says

zzyzzx says

I'd be OK with a more then modest tariff.

Tariffs are a two way street.

Not when you have an epic sized trade deficit like we do!

That is only the apparency. The reality is that the Chinese devalued the Yuan in order to create trade. The US had to oblige because of it being the reserve currency of the world.

So now the trade deficit has to re balance because the Chinese need to clear their market.

indigenous says

So now the trade deficit has to re balance because the Chinese need to clear
their market.

What exactly do you mean--they have to "clear their market?" Clear their market of what?

tatupu70 says

What exactly do you mean

This was covered before, they have to bankrupt companies that need to bankrupt and the assets need to be sold off. The value of the Yuan has to be revalued to a level that the standard of living of the workers is such that they are willing to work for that pay level. They need to quit spending money on empty cities in order to make their GDP look good.

indigenous says

This was covered before, they have to bankrupt companies that need to
bankrupt and the assets need to be sold off. The value of the Yuan has to be
revalued to a level that the standard of living of the workers is such that they
are willing to work for that pay level. They need to quit spending money on
empty cities in order to make their GDP look good.

So, clearing the market consists of bankrupting companies, raising the value of the yuan, and reducing spending?

Those seem like disparate activities--how do they all contribute to "clearing the market"?

tatupu70 says

Those seem like disparate activities--how do they all contribute to "clearing the market"?

Because they do, they create commerce. If a retailer has inventory he cannot sell he reduces the price by having a sale. If a company cannot pay its bills it declares bankruptcy. The only one who does not have to do this is the government or its cronies.

indigenous says

Because they do, they create commerce. If a retailer has inventory he cannot
sell he reduces the price by having a sale. If a company cannot pay its bills it
declares bankruptcy. The only one who does not have to do this is the government
or its cronies.

Yes, very good. So, how again does that relate to China having to strive for a stronger currency?

I don't think we're talking about China needing to create commerce.

tatupu70 says

Yes, very good. So, how again does that relate to China having to strive for a stronger currency?

Because the Chinese economy suffers from over investment. Consequently their economy is no longer growing.

Reality says

I have had 2 serial long term GF's (plus a couple short-term ones in between) since 2008. They were very hot

Pics please!

bob2356 says

Reality says

No, it is not in the con business like Keynesians.

Keynesians (not that anyone has actually implemented what Keynes wrote)

What Keynes wrote had been implemented even before Keynes wrote it. Nazi Germany was on a massive Keynesian program, from building Autobahn to military buildup, before Keynes wrote his book. Italian Fascists did it even earlier.

and Austrians are both in a con game. Austrian translates into plutocratic oligopoly, Keynesian translates into welfare state.

Keynesianism leads to both oligopoly and welfare state. There is no contradiction between welfare and aristocracy . . . after all, it was Bismarck the consummate aristocrat who introduced the very first modern welfare state, in order to uphold the social status of the aristocrats and to tax / put down the upstarts in the market place.

zzyzzx says

Not when you have an epic sized trade deficit like we do!

As of fourth-quarter 2013, the trade deficit was a mere 2.2% of GDP. This is due to fracking/shale energy production, increased use of service (as opposed to manufactured) products by aging baby boomers, and increased consumption of onshore goods.

2.2% is quite low.

(Source: The Economist, January 4th issue)